“Listen to the people,” Rob Muldoon used to tell his caucus of National MPs, and it wasn't bad advice. Sometimes some of us wondered which people he was listening to but, in general, with some political leadership, "the people" usually get it right.

It always worries me when we measure our nation's financial wellbeing by the amount we spend in shops, big and small. Surely that has caused the problems over the last few years; we have individually spent too much, frequently borrowing to meet those costs.

For the last decade, I have advised people on their budgeting problems. As this service is free, we tend to see those who are in real trouble and standing on the brink of bankruptcy. Although we now call it something less jarring, bankruptcy is what it is, with all the painful downsides. It amazes me how people on such low incomes can rack up such huge hire-purchase bills; try $35,000 for a young lass on a DPB. These young women and, in my experience, they usually are women, are also ripped off by expensive Christmas club saving schemes. They outrageously pander to these women's desire to do right by their kids at Christmas; in my book, they should be regulated out of existence.

Door-to-door sales vans are another of my pet hates. The vendors don't actually go door to door otherwise they would come under the consumer protection legislation; they inveigle the unsuspecting customers to their vans parked on the roadside. There they do their fiscal damage. But I angrily digress.

In the last few years, leaders such as Bill English and John Key have both preached the gospel of "save rather than spend". They are setting a good fiscal example by trying to reduce the amounts Government spends and, at the same time, attempting to reduce the rate of borrowing by selling assets.

Now "the people" are doing the same. Their demand for Chinese knick-knacks and gewgaws has declined to a point where inflation is almost flat lining at 1 per cent; demand and supply are almost even.

Latest Statistics Department and Reserve Bank figures show that last year household savings grew at nearly five times the rate of household debt. In round figures, this meant that household financial assets increased by $8.3 billion ($30,000 per household). These include such things as cash deposits, shares and superannuation schemes. Household debt increased by only $1.8 billion in the same period ($10,800 per household). This debt included such things as credit card balances, personal loans and mortgages. This produces net savings of $19,200 per household, not bad!

No wonder the retailers are doing it tough, with heavy discounting the norm. In Auckland, retail sales are down 3 per cent on last year.

Of course, we are following a Western world trend. The United States economy shows almost no spending, and subsequently no growth; it has been labelled the lost decade. According to McKinsey Global Institute, a renowned growth and investment adviser, individual Americans have, since 2008, taken the lead among other wealthy countries in getting their own finances back into order. For the six decades previous to that, they had steadily increased their household debt loads. When the financial crisis hit, this individual debt had risen to 129 per cent of disposable household income. Since then this figure has dropped by 11 per cent (6 per cent in Britain). Slowly the US housing market is picking up, as it is here in New Zealand.

Mind you the US has a long way to go before it can match the fall in household debt experienced in Finland and Sweden, where a decade ago it fell 30 per cent in similar circumstances. But, in my experience, Swedes and Finns are of a much dourer disposition and can hunker down in those sunless days to do the job; I wonder if their birth rates increased?

Where does it go from here? If the Swedish model is anything to go by, things should take a definite upturn. As their currency weakened their exports boomed. This is happening in the US right now. In Sweden their exports grew by over 10 per cent a year over a four-year period. This fuelled manufacturing growth, increasing job creation. In New Zealand, manufacturing is up 12 per cent on last year. This is a wage-led growth strategy rather than a retail sales one and, in my book, a better way to climb out of the morass of bad figures.

By now you will have realised I'm no economist, but it does appear to me that the people affected by bad economic decisions are now taking it in their own hands to straighten out their balance sheets; go the people, I say.